Emlpoyment regulation

Following a Call for Advice issued by the DG Employment and Social Affairs, EIOPA has published a consultation paper (Report on Good Practices on individual transfers of supplementary occupational pension rights) in January 2015. The deadline for responses was 10 April 2015.

The European Parliament adopted the Directive Enhancing worker mobility by improving the acquisition and preservation of supplementary pension rights (also known as former Portability Directive) in April 2015, it was published in the Official Journal of the European Union on 30 April 2014. After a controversial proposal from October 2005, the Commission published a new proposal in October 2007 which aimed at introducing minimum standards for the acquisition and safeguarding of supplementary pensions. However, the legal process came to a halt at the end of 2007.

The Council resumed work on the proposal at the end of 2012, which led to a Compromise text in the Trilogue between Council, European Parliament and the Commission in November 2013. In February 2014, the Council agreed a Position (First Reading), which led to the text to be adopted by the Parliament in April 2014.


 

Labour market mobility within the EU – new figures

The European Commission has published a new report on Labour Market Mobility in the EU on 25 September 2014. The following are the most relevant figures:

  • Taking stock: “In 2013, slightly over 7 million EU citizens worked and lived in an EU country other than their own. They represented 3.3% of total employment in the EU.“
  • Different types of mobility: “In addition to the 7 million EU citizens that were working and residing in another EU country in 2013, around 1.1 million were living in one country but working in another (frontier or cross-border workers) and around 1.2 million each year are posted to another country.”
  • Expected trends: „Over the last ten years, two key developments have created new opportunities and patterns of intra-EU mobility: First, as a result of the latest EU enlargements, the number of EU-12 citizens residing in EU-15 Member States has increased from 1.7 to 5.6 million. Second, the recent Eurozone crisis has acted as a stimulus for intra-EU mobility.”

 The figures on labour market mobility within the EU are i.a. important in relation to the portability of supplementary pension rights, as well as for the “Track and Trace your Pensions in Europe Project”.


 

EP adopts what is known as the former Portability Directive

The European Parliament adopted on 15 April 2014 the Directive Enhancing worker mobility by improving the acquisition and preservation of supplementary pension rights (also known as former Portability Directive). The Directive was published in the Official Journal of the European Union on 30 April 2014.


 

Aba Position paper The "Portability Directive"

In September 2013 the aba published a position paper regarding the expected Directive text. The main points discussed in the paper are: 

  • Rather than enhancing “worker mobility between Member States”, the attractiveness and thereby coverage of occupational pensions should be increased. In particular the conditions for German occupational pensions should not be worsened. The title of the Directive should make clear that it is not covering all supplementary pensions. We therefore suggest referring to “occupational pensions”.
  • To enhance worker mobility between Member States and at the same time increase the attractiveness of occupational pensions, it should be examined whether there is a possibility for mutual (tax) recognition of occupational pensions, at least for periods when workers are posted abroad for a limited period of time. This could be included in the proposed Directive.
  • The Directive’s scope of application should be limited to new pension promises. National legislatures should define what constitutes a new pension promise.
  • A limitation of the scope of application to employees changing their employers across Member States should not only be mentioned in Recital 5, but also be included in the title of the Directive. We suggest adding “worker mobility between Member States” to the title. This limitation should also be mentioned in Art. 2, which defines the scope of application.
  • Considering small and medium sized enterprises (SME) as well as sectors where coverage has not reached the desired levels, minimum age and vesting period should be guided by the average length of vocational training or similar programmes.
  • We advocate a maximum length of vesting period and/or waiting period (in the German translation it is called “Wartezeit”, but following German law it should be called “Vorschaltzeit”) of five years. If the maximum length is lowered, we call for this change to be accompanied by tax advantages.
  • To give the social partners flexibility when implementing the Directive, the Directive should refer to “comparable protection” or “if everything is considered no less favourable” than set out in the Directive. 

 

     

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